Russia urges stronger G-20 stance on currency manipulation

The Group of 20 nations should take a stronger stance against currency manipulation at a meeting in Moscow, Russian Finance Minister Anton Siluanov said after conflicting statements on the weakening yen roiled markets.

Russia wants more “specific” language opposing exchange- rate interference in the communique that will be issued after talks among finance chiefs this week, Siluanov said in an interview today with Bloomberg Television’s Ryan Chilcote. Russia holds the G-20’s rotating presidency this year.

“The G-20 countries have always held the position that currency policy should be based on market conditions,” Siluanov said. “I think we should take a more specific stance on this.”

Russian central bank First Deputy Chairman Alexey Ulyukayev warned last month that the world was nearing the brink of a fresh “currency war” as countries weaken their currencies to make their exports more competitive. The yen has tumbled 17% in the past three months against the dollar. Financial markets whipsawed two days ago as the Group of Seven major industrialized countries issued a statement viewed by investors as accepting a declining yen, only for officials to then split over whether Japan was being singled out.

Yen Tolerance

The spotlight now falls on this weekend’s G-20 meeting in the Russian capital as investors question how much tolerance there is for a weaker yen.

G-20 finance chiefs in November called for member nations to refrain from competitive devaluations and move rapidly toward more market-based exchange rates. One issue that will be addressed in Moscow is how foreign bond purchases can influence exchange rates, Siluanov said.

“Sharp moves in exchange rates of any country should be predictable, and actually shouldn’t happen at all,” he said. “We need to speak out more precisely about this issue and perhaps move from general phrases to more specific measures.”

New Japanese Prime Minister Shinzo Abe’s government denies driving a devaluation, saying its two-month effort to revive the economy through looser monetary policy is aimed at ending deflation.